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U.S. stocks mostly fell in early trading on Friday, with the energy sector leading the move lower on reports that the OPEC and major oil producer Russia were considering lifting some curbs on oil output, sparking a steep decline in crude prices. However, technology-related shares were seeing a late-morning rebound.
Ahead of a three-day weekend, with markets closed on Monday in observance of Memorial Day, investors were also looking ahead to remarks by Federal Reserve policy makers, including Fed Chairman Jerome Powell.
What are markets doing?
The Dow Jones Industrial Average fell 52 points, or 0.2%, to 24,754. The S&P 500 was down 7 points, or 0.2%, to 2,721. The Nasdaq Composite Index was 23 points, or 0.3%, higher at 7,447.
For the week, the Dow was up 0.2%, the S&P 500 has gained 0.4%, while the Nasdaq was on track for a 1.2% rise.
What’s driving the markets?
Investors will keep an eye on geopolitical headlines. After President Donald Trump called off a June 12 summit with North Korea, a senior official from Pyongyang said its leader Kim Jong Un is still willing to meet. U.S. stocks briefly tumbled Thursday on news that Trump had pulled out, but traders seemed to be finding some reassurance in North Korea’s measured response.
“We express our willingness to sit down face-to-face with the U.S. and resolve issues anytime and in any format,” said Kim Kye Gwan, a senior North Korea foreign ministry official, in a statement published by the North’s official state media. She was the same official who had harsher words for the U.S. administration a week ago.
Crude-oil futures tumbled 3.3% following the reports that the Organization of the Petroleum Exporting Countries and other major producers may lift production by as many as 1 million barrels a day, which would add a deluge of supply to the market. Crude prices are up more than 13% thus far this year, which has lifted the energy sector. The industry is up more than 9% since the start of April, supported in large part by the rally in commodity prices.
The Energy Select Sector SPDR ETF fell 3%, tracking its worst day since February.
Investors may also watch to see whether any U.S. companies are struggling to comply with the new European data protection rules introduced Friday, seen as a potential risk for online advertising providers.
What are market analysts saying?
“If the Saudis do lift oil production, that could be the news of the day. It may result in a weak patch for the energy sector, but for the broader market that could be offset by a rise in sentiment if it results in gas prices falling going into the summer driving season,” said John Augustine, chief investment officer at Huntington Private Bank.
“There’s still a lot of questions about geopolitical issues with North Korea. Recent developments have seemed positive, but there’s a big question of what the sentiment is going to look like during the long weekend. The question for investors is whether they should wait until Tuesday to see what happened over the weekend and make decisions then.”
What’s on the economic docket?
Durable-goods orders fell 1.7% April, but the decline was almost entirely due to a decline in contracts for Boeing planes. Most businesses took in more orders and increased investment last month.
Separately, a read on consumer sentiment came in at 98 in May, down from April’s reading of 98.8.
Investors will hear from several Fed officials on Friday, including Chairman Jerome Powell, who will appear on a panel on financial stability and central bank transparency at a conference in Stockholm.
The presidents of the Chicago and Dallas Feds, Charles Evans and Rob Kaplan, are expected to speak on a panel at a Dallas Fed conference on technology and disruption at 11:45 a.m. Eastern.
Which stocks are in focus?
Energy stocks were among the most active of the day. Exxon Mobil Corp. fell 2.2% while Chevron Corp. was down 3.3%. Both stocks are Dow components.
Foot Locker Inc . soared 15% after profit and sales for the sportswear maker beat forecasts.
Zoe’s Kitchen Inc. shares plunged 34% after the restaurant chain posted a bigger-than-expected first-quarter loss.
Shares of Gap Inc. fell 13% after the retailer missed earnings expectations and reported weaker same-store sales late Thursday.
Apple Inc. may be in focus after Samsung Electronics Co. was ordered by a federal jury to pay the iPhone maker $539 million for infringing patents related to phone designs. It is the latest development in a legal battle that has stretched over seven years. The stock rose 0.6%.
What are other markets doing?
After a cautious session, Asian stocks finished in the red for the week, led by a 2% drop for the Nikkei 225 index European stocks were mostly higher, outside of Spain, where stocks were under pressure on political worries.
The ICE U.S. Dollar Index moved up 0.4% to 94.14. The 10-year Treasury note yield were trading around 2.92%.
Gold futures inched down to $1,303.40 an ounce.